Oluoch v Sibed Transport Co Limited (Civil Appeal 291 of 2019) [2025] KECA 98 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that employers without written contracts bear the burden of proving employment terms, awarding a former worker unpaid salary, leave and housing allowance.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the appellant was an employee of the respondent, and on what terms
- 2.Whether the appellant was entitled to balance of salary for September 2011 and salary for January 2012
- 3.Whether the appellant was entitled to payment in lieu of annual leave for 2 years and 10 months
- 4.Whether the appellant was entitled to gratuity
- 5.Whether the appellant proved his claim for overtime
- 6.Whether the appellant was entitled to housing allowance
- 7.Whether the appellant was entitled to a transfer allowance to Mombasa
Key legal issues
#Terms of employment where no written contract is produced
The respondent's denial of an employment relationship could not hold; the appellant was held to be a permanent employee from 4th April 2009, the burden of proving terms being on the employer under section 10(7) of the Employment Act
A letter on record described the appellant as the respondent's agent authorized to handle loading of trucks, and the respondent's own director confirmed the appellant was their employee based at Nakuru and later transferred to Mombasa. The respondent never produced a written contract, so under section 10(7) the burden of proving or disproving alleged terms fell on it. The court therefore found permanent employment as required by the Employment Act, 2007.
Unpaid salary claims (September 2011 balance and January 2012)
The appellant proved on a balance of probabilities that he was owed Kshs. 20,000 for September 2011 and Kshs. 30,000 for January 2012, as the employer bore the burden of proving payment
The employer was responsible under section 10(7) of the Employment Act to produce documents showing payment of wages. Having failed to discharge that burden, the appellant's testimony that only Kshs. 10,000 was paid for September 2011, and that no salary was paid for January 2012 despite his resignation taking effect on 31st January 2012, stood uncontroverted.
Annual leave entitlement
The respondent failed to produce records showing the appellant took annual leave; he was awarded Kshs. 85,000 for 2 years and 10 months of untaken leave
Section 28 of the Employment Act entitles an employee to not less than 21 working days' annual leave with full pay after every twelve months. The employer bears the duty of keeping and producing records of leave taken; failing that, the employee's claim that he never proceeded on leave for the entire period of service is accepted.
Housing allowance where the contract is silent
The court adopted the 15% of basic salary formula from Grain Pro Kenya, awarding Kshs. 153,000 for 2 years and 10 months
Section 31 of the Employment Act obliges an employer to provide reasonable housing accommodation or pay a sufficient sum as rent, unless the contract consolidates a housing element into wages. The respondent provided neither accommodation nor house allowance, and the contract did not consolidate wages, so the adopted 15% formula applied to the basic salary over the 34 months of service.
Gratuity, overtime and transfer allowance
All three claims failed for want of contractual entitlement, evidence, or pleading and proof of special damage
Gratuity is a gratuitous payment payable only if provided for in the contract of employment, and no contract was produced. The overtime claim was contradicted by the appellant's own testimony and unsupported by evidence. The transfer allowance was a special damage claim requiring pleading and proof of expenses, none of which was placed before the court.
Legal principles established
#- Where an employer fails to produce a written contract or written particulars of employment, the burden of proving or disproving an alleged term of employment lies on the employer
- In a first appeal, the Court of Appeal re-evaluates the evidence and reaches its own conclusions of fact, while making due allowance for not having seen or heard the witnesses
- Where an employment contract does not provide for housing allowance, 15% of the basic salary is the reasonable percentage awarded as housing allowance
- An employer must allow an employee annual leave of not less than 21 working days after every twelve months with full pay
Court orders
#- 1.The judgment of the ELRC delivered on 7th December 2018 is set aside and the appeal is partially allowed
- 2.Kshs. 20,000 awarded as balance of September 2011 salary
- 3.Kshs. 30,000 awarded as salary for January 2012
- 4.Kshs. 85,000 awarded as annual leave entitlement for 2 years and 10 months
- 5.Kshs. 153,000 awarded as housing allowance entitlement for 2 years and 10 months
- 6.The appellant to have half of the costs of the appeal and of the suit in the court below
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- Not stated in the judgment
- Jurisdiction invoked
- First appeal to the Court of Appeal from the Employment and Labour Relations Court (no specific constitutional/statutory provision cited in the judgment)
Relief refused
#Gratuity for 2 years and 10 months (Kshs. 45,000)
No contract of employment entitling the appellant to gratuity
Overtime (Kshs. 784,615)
No evidence led to support the claim; the appellant's testimony contradicted his pleading
Transfer allowance to Mombasa (Kshs. 25,000)
No material placed before the court showing entitlement, quantum or expenses incurred; a special damage claim requiring pleading and proof
Claim of unfair termination or wrongful dismissal
The appellant resigned from employment, so the issue did not arise
Costs
The appellant will have half of the costs of the appeal and of the suit in the court below
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In sum therefore, we partially allow this appeal by setting aside the judgment of the ELRC delivered on 7th December, 2018.
The appeal having partially succeeded, the appellant will have half of the costs of the appeal and of the suit in the court below.
We award the appellant the following claims: i. Kshs.20,000 being balance of September, 2011 salary. ii. Kshs.30,000 being salary January, 2012. iii. Kshs.85,000 being annual leave entitlement for 2 years and 10 months. iv. Kshs.153,000 being housing allowance entitlement for 2 years 10 months.
If in any legal proceedings an employer fails to produce a written contract or the written particulars prescribed in subsection (1) the burden of proving or disproving an alleged term of employment stipulated in the contract shall be on the employer.
To us 15% is reasonable percentage that an employee spends from part of a salary to pay house rent.
this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect
Issues in the judgment
#The numbering of the claims repeats 'v.' for both overtime and transfer allowance ('v. Overtime.' and later 'v. Transfer allowance to Mombasa.'), skipping 'vi.' in the analysis section
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Pride Inn Paradise Beach Resort & Spa v Rai & 6 others (Appeal E183 of 2024) [2025] KEELRC 1100 (KLR)[2025] KEELRC 1100 (KLR)3 Apr 2025applied
Cite this brief
#Cite this brief
Caselaw, "Oluoch v Sibed Transport Co Limited (Civil Appeal 291 of 2019) [2025] KECA 98 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/98/eng@2025-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.